Retirement Planning

Whether your retirement is a few decades or a few months away, now is the time to prepare for your postcareer years. While you’re daydreaming of one day surfing the coast of Florida, why not surf the Net for some tips to help you save for retirement?

One of the first steps toward a successful and stress-free retirement is to understand your options for saving money (and how to avoid unnecessary tax penalties). Although the Social Security system has helped provide for retired Americans for over 70 years, the system's uncertain future is putting more pressure on younger generations to prepare for retirement independently. In this section we’ll provide sites that give you an outline of your saving options, so you can be confident about choosing a retirement strategy that's right for you.

This guide, like many of the sites recommended here, includes some terminology that you might not be familiar with; Investopedia, published by Forbes, provides an extensive list of retirement terms that should help you understand retirement lingo (and pick up some retirement tips along the way).

Many banks provide information about saving for retirement online and offer retirement savings services such as IRAs or other investments. Some you'll be able to sign up for online, whereas others require a bank branch visit to set up. Your own bank might waive fees or provide better rates if you open accounts there, or it might be able to provide you with more information, such as access to a financial advisor, that could help you make a decision about what sort of account to open (and even where to open it).

To begin your search for retirement plans, try checking your company’s intranet (internal Web site) for information about plans such as a 401(k) that might be available to you. If your company doesn’t have such a Web site, ask someone in your HR department.

Any type of saving can be considered "retirement planning." Investing in real estate, buying stocks, or contributing to a savings account are all ways of preparing for the future. In this guide we'll focus on tax advantaged plans, such as IRAs and 401(k)s.

Whether you're a seasoned investor or new to financial planning, you'll benefit by having a glossary of retirement terms handy to refer to when unfamiliar words crop up. The Washington Post has a short glossary with definitions for common retirement terms, such as 401(k), Keogh Plan, and Roth IRA. The Motley Fool's "All About IRAs" section has an IRA glossary with definitions for nearly 20 key IRA terms and concepts. For something slightly more comprehensive, explore TD Ameritrade's "Planning & Retirement" glossary.

“Tax deferral” means postponing the payment of taxes on an investment until a future date. With a 401(k) a percentage of a worker's wage is added to the plan pretax, and payment of those taxes is deferred until the worker decides to withdraw funds in the future, making the plan tax-deferred. A tax deductible expense, such as the funds added yearly to certain types of IRAs, is subtracted from a worker's gross income, reducing his or her taxable income at the end of the year.

The Internal Revenue Service
offers information about the different types of tax-advantaged retirement plans, such as IRA-based plans, 401(k) plans, and IRC 403(b) Tax Sheltered Annuity Plans. Click on a retirement plan of your choice to get a definition of the type of plan as a whole (for example, an explanation of what IRAs are) and then examples and definitions of specific types of accounts or investments that fall into each plan.

Money Magazine
at CNNMoney.com has a retirement planning lesson in its “Money 101” section that provides an outline of things to know about retirement planning as well as the basics of 401(k) plans and IRAs, which are the most commonly utilized retirement vehicles. This section also has a quiz that you can take after you’ve finished reading to see how much information you’ve retained.

The Motley Fool
publishes “Is Your 401(k) Foolish?” provides an extensive (and quirky) explanation of 401(k)s and 403(b)s. This guide begins with a 101 course to 401(k)s, gives advice about how to choose your investments wisely, and much more.

Kiplinger.com
presents this article "Max out your 401(k)." It's a guide to understanding 401(k)s, and more importantly, getting the most out of them. It offers tips on forming a plan, padding your 401(k), and understanding the myriad rules that govern how money goes into and comes out of them.

The IRS
has a simple and concise explanation of IRA-based accounts. Here you'll find definitions of traditional, Roth, SARSEP, SEP, and SIMPLE IRA plans. The IRS also offers "check-ups" to help business owners and employers understand the different IRA plans and which plan is best suited for their company.

The Motley Fool
presemts “All About IRAs,” a comprehensive guide to the IRA. This guide covers the 11 types of IRAs; discusses contributions, conversion, and distributions of your IRA funds; gives answers to common IRA questions; and even provides a short IRA glossary. Read this guide from start to finish or navigate to a section of interest using the list of sections on the right side of the page.

SmartMoney.com’
presents “Which IRA Is Best?,” explaining the three major types of IRAs (Roth, deductible, and nondeductible) and provides a chart to let you know who is eligible for each type, the maximum yearly contributions allowed for each, and the regulations regarding withdrawals. This article should help you determine which IRA is right for you.

Eons
publishes this article with the "10 myths of IRA investing." Sponsored content alert: content for the article is provided by Fidelity Investments, so the article is peppered with “How Fidelity can help” links.

The U.S. Social Security Administration
site has a retirement planner that helps you understand your social security retirement benefits, provides benefit calculators, explains retirement options, and more.

AARP’s
“Social Security 101” gives a quick overview of what social security is and who is eligible to collect it. The main social security section of the AARP site has articles and opinion pieces from the AARP about current social security laws and potential changes to the social security system.

SMSmallBiz’s
“Tax-Free Retirement Accounts for the Self-Employed” provides a chart of the different types of retirement accounts you can set up as a self-employed individual and the yearly contribution limits of each. Not sure what the difference is between a Roth IRA and an SEP? No problem; this page also explains in further detail what each account is and how it might benefit you.

Fidelity
has information to help the small business owner choose between SEP-IRAs, SIMPLE-IRAs, investment-only plans, 401(k)s, and self-employed 401(k)s. The information is pretty straightforward and credible, but keep in mind that Fidelity is also pitching their products and services, and there are alternatives.

MarketWatch
published this article in 2006, entitled, "'Dilbert' deserves the economics Nobel," describes how the nine-step financial formula devised by the "Dilbert" cartoon's creator, Scott Adams, is not only brilliant but, in a parallel universe, worthy of the Nobel prize.